RealtyHop Housing Affordability Index: June 2019

Posted May 29th, 2019

In this June installment of the RealtyHop Housing Affordability Index, we investigate the decision to purchase a home in the 100 most populous cities across America. Is homeownership affordable or even possible for the average family in each city? Every month we analyze proprietary RealtyHop data alongside comprehensive U.S. Census data to find out. See how your city fares in affordability.

 

The 5 Least Affordable Housing Markets

 

1. Los Angeles, CA continued to be the most expensive city in America to own a home. In fact, the city saw a 0.72% increase in our index, meaning that the average household would need to allocate 90.1% of total monthly income to own a home.

2. Miami, FL displaced New York to take second place on our list. The city’s index remained steady, anchored by an average home sales price of $499,000. Residents on average can expect to shell out 85.93% of income towards homeownership costs.

3. New York, NY dropped one spot to third on our list, as home sales prices dipped slightly to $900,000. However, the city continued to experience an extremely high cost burden. The average household would have to allocate 85.31% of total income if they decided to purchase a home.

4. San Francisco, CA saw a 3.92% increase in our index this June, as median home sales prices increased from $1.25M to $1.3M. Despite high annual incomes, housing prices coupled with high local taxes, make ownership extremely difficult for the average household.

5. Oakland, CA rounds out our top five, placing right behind its Bay Area neighbor, San Francisco. Though slightly more affordable than SF proper, the average home-owning household can expect to pay two thirds of monthly income toward mortgage and tax costs.

 

The 5 Most Affordable Housing Markets

 

1. Detroit, MI retained the title of the most affordable housing market, despite an increase in homeownership burden for the second straight month. The average home sales price continued to be low at $49,900, coupled with household income of $27,838. This led to a very affordable housing affordability index of 13.01%.

2. Fort Wayne, IN was the second most affordable housing market this June, even with a sharp 5.58% increase in housing burden. The change was due to a hike in sales prices over the month to a median of $126,700.

3. Wichita, KS moved up one spot on the most affordable housing list as the city’s homeownership burden index decreased 1.72%. The average household in the city can expect to only spend 17.34% of monthly income to own a home.

4. Cleveland, OH saw a sharp 6% increase in homeownership burden, but retained the fourth most affordable spot on our list. The jump was due to a bump in housing prices to a median of $79,500.

5. Indianapolis, INwas again the fifth most affordable homeownership market. While home prices increased from $153,000 to $161,000, the city remained narrowly more affordable than next place Kansas City, MO.

 

Notable Changes This June

 

  • Cincinnati, OH dropped nine spots on our list. The city’s 5% decrease in homeownership burden was due to a dip in median housing prices from $169,500 to $161,000.
  • Arlington, TX was the 54th most expensive housing market in the country this June. The city experienced a 7% drop in homeownership burden month over month, with the average household needing to allocate a reasonable 30% of monthly income to homeownership costs.
  • Raleigh, NC dropped 13 spots on our list to settle at 74th place. This increase in affordability was due to a drop in housing prices to $293,000. Homeowners in the city can expect to allocate 27.69% of monthly income toward mortgage and tax costs.

 

Methodology

 

The RealtyHop Housing Affordability Index analyzes both proprietary and ACS Census data to provide an index of housing affordability and homeownership burden across the 100 most populous cities in the country. Median home prices are calculated using over 300,000 listings in the RealtyHop database over the month prior to publication.

 

To calculate the index, the following statistics are used:

1) Median household income from the U.S. Census

2) Median for-sale home listing prices via RealtyHop data

3) Local property taxes via ACS Census data

4) Mortgage expenses, assuming a 30 year mortgage, 4.5% interest rate, and 20% down payment.

 

See below for the previous two Housing Affordability Indexes:

Full Dataset